The US dollar gained strength as recent data supported the Fed’s decision to stay patient on rate cuts. Despite a dip in the manufacturing index, overall economic activity grew in July, with price pressures intensifying.

The US and EU secured a trade deal, putting pressure on other countries facing tariff deadlines. President Trump’s desire for rate cuts may clash with the Fed’s cautious approach, especially after recent trade agreements have eased inflation risks.

Wall Street hit record highs on optimism over trade deals and strong earnings. Talks between the US and China could extend the truce, boosting risk appetite. Big-tech earnings this week will be closely watched for further market direction.

The Pound fell after weak retail sales data, raising expectations for a rate cut by the Bank of England. The Yen also retreated despite the US-Japan trade deal, signaling a slower pace of rate hikes by the Bank of Japan.

Read more at Investing.com: US Data Supports Patient Fed, Deal With EU Boosts Appetite